Vulnerability of UK’s energy supply exposed

Published: 21 January, 2010

The January cut-offs in gas supply to industry have been highlighted as the first signs that energy shortages are now beginning to translate into energy interruptions.

Commenting on the first cut offs in gas supply to Industry as a result of the severe weather, EEF energy adviser, Roger Salomone, said: "We have been warning of such interruptions for a long time and the need for urgent investment in our infrastructure to avoid them. The longstanding vulnerability in our energy system has today been exposed and as a nation we now need to take security of our energy supply more seriously."

"In particular, a wide spectrum of bodies have been lobbying for adequate incentives for gas storage to bring us up to the same levels as other countries on the continent. However, these calls have been ignored and we are now seeing the consequences. Unless we invest in gas storage facilities to the same levels as other industrialised nations this could have a very damaging effect on manufacturing companies in the future."

National Grid had asked gas suppliers to tell 95 large users on interruptible contracts - 55 East Midlands, 39 North West and 1 East Anglia - to stop using gas because of high gas demand in those regions.

Energy Minister Lord Hunt commented on the cuts: "This is a period of exceptionally high demand. The system is coping as it should. These sort of arrangements have been commercially entered into."

Although the National Grid says the number of large gas users on interruptible contracts who were told to stop using gas, were reduced from 95 to 27 on the 8th January, the fact that this situation had occurred at all has raised serious questions about the vulnerability of the UK's energy supply.

Only those who have chosen to be on interruptible contracts are affected. This means they pay lower gas transportation charges to their supplier in return for agreeing to be interrupted at times of very high demand for gas.

The use of interruptible contracts is one of the standard tools National Grid uses to balance the gas network in the conditions we expect to see in a severe winter.

National Grid has asked gas shippers (suppliers) to invoke their interruptible contracts because of the extremely cold weather in those regions.

National Grid director of network strategy, Jeremy Bending said: "This is not about a lack of gas or a lack of investment in infrastructure or rationing. This is a commercial decision by companies to benefit from discounted prices in exchange for being flexible when demand is at its highest. This flex exists not because of a lack of gas but to balance demand and pressure on local pipe networks."